Illegal Lotteries are Serious Threats

You are probably aware of these phony "you-have-won-millions" propositions. This has nothing to do with the Texas Lottery. This is a glitzy piece of junk mail or a smooth-talking telephone operator, and the story is always pretty much the same. A Texas senior receives a big, colorful and official-looking announcement, or receives a call from an excited telemarketer who tells the victim that he or she has won millions, maybe even tens of millions of dollars.

The catch? To collect the grand prize, all you have to do is send a small sum of money – small in relation to the prize, that is. It may be several thousand dollars. The victim is told that the money is a transfer fee or a tax payment. The exact explanation may vary, but the dead giveaway is that you have to pay money to collect your prize. Anytime a winner has to pay money to get money, the contest, sweepstakes, or lottery is a fraud.

Once a victim has sent the first sum of money – it may actually be a small amount to begin with – the scammer will ask for more. And more. And more. We have seen cases where victims have ended up sending all their retirement funds and taken out loans, even second mortgages, in an increasingly desperate attempt to make good on what they thought was a stroke of luck. In many cases, the victim wants the money for an ailing spouse or to help struggling family members.

Many seniors simply cannot face the fact that the grand prize is a scam, especially once they have already lost a lot of money. They almost never get their money back. The lotteries often really are in foreign countries. Prosecution is extremely difficult, involving complicated investigations in partnership with law enforcement agencies in other countries.

By far the best thing we can do is to educate consumers so they will not fall victim in the first place, and this we make every effort to do. In addition, we look for ways to intervene before a victim has lost everything.

A couple of weeks ago, we recognized a number of bank employees who intervened when they noticed clients making unusually large withdrawals from their accounts. In Austin, for example, a bank associate manager saved a customer in her 80s from incurring additional staggering losses to a lottery scam. The woman had already withdrawn several thousand dollars that she believed was necessary to cover fees before a grand prize could be sent to her.

In Victoria, a bank employee grew suspicious when a customer said he had won a lottery based in Spain, and made the customer realize he was being conned. In Corpus Christi, a bank employee grew suspicious when an 89-year-old consumer asked for overdraft protection for a $1,200 check to cover fees for a $250,000 sweepstakes prize. The alert banker convinced the would-be victim not to send any money.

Another Corpus Christi banker prevented a customer in her 60s from sending $600 to claim a bogus multi-million dollar prize in the Spanish "El Gordo" lottery. She also warned the consumer against providing telemarketers with the bank account and routing numbers they requested, suspecting that they wanted the information to steal the consumer’s identity and empty her bank account.

Impressed by the example these bankers have set, we have developed an online training for all bank tellers. With support from Adult Protective Services, the Texas Department of Banking, the Independent Bankers Association of Texas, and the Texas Bankers Association, we have made this fraud prevention online curriculum available to bank employees and the general public through our homepage at www.oag.state.tx.us, in the Senior Texans section.

You can help. Our investigators have found, and the bankers we have spoken to have found, that once a person has been thoroughly hooked by a scam of this nature, it can be very difficult to convince that person that there is no grand prize just out of reach. Sometimes a uniform can be more persuasive than words. The respect that you command as a law enforcement officer can be used to convince a would-be victim not to send any more money to a crook.

The victims of these crimes tend to be law-abiding citizens, so it may also help them to know that it is illegal to buy or sell lottery tickets by across state or national borders. The sale and trafficking in foreign lotteries is a violation of federal criminal law, including laws prohibiting the importing and transmitting of lottery materials or information in interstate or foreign commerce, 18 U.S.C. §§ 1301 and 1302.

Thus even if the scammer is masquerading under the name of a real lottery (such as El Gordo), it would be illegal to buy or sell tickets to that lottery across state and national boundaries. Most of the scams we see are not connected with real foreign lotteries. And most of the victims have not bought tickets. But the promotions and transactions associated with these scams are violations of federal criminal law.

It might help a potential victim to know that this activity is against the law, and this information is credible coming from you. I urge everyone in law enforcement to be prepared to back up the concerned friend, banker or family member of a senior Texan who is in danger of being bilked by a bogus sweepstakes or lottery.

I know how many of you are deeply committed to crime prevention and to the protection of Texas seniors. I salute the work you do in our communities. Anytime we can be of assistance, I hope you will not hesitate to contact us.

Greg Abbott
Attorney General of Texas